The long-term objective of the proposed research is to understand the extent to which and the processes by which neighborhood environments influence the mental health and development children. The specific aims are: 1) understanding how economic and physical environment of neighborhood blocks and buildings are related to children's anxiety, depressive symptoms; perceived competence, and school achievement, while controlling for the child's family's economic situation; and 2) understanding how the effects of these environmental conditions may be mediated by children's encounters with neighborhood hassles and by the proximity of supportive and disruptive social network members. The proposed research will primarily use data from the second wave of a longitudinal study of homeless and housed poor families. Dependent measures include mothers' and children's reports of children's diagnosable depression and anxiety, children's self-reports of perceived competence, and school academic achievement. Independent measures include mothers' reports on and observer ratings of neighborhoods, buildings, and blocks as well as census data pertaining to the economic status and housing conditions of neighborhoods. Mediators are assessed with child self- reports.